Sequential morphologic studies revealed that transient squamous metaplasia of alveolar epithelial cells develops during the healing phase of alveolar epithelial injury produced by the pulmonary toxicity of paraquat. This transient metaplasia represents an early effort to reline denuded alveolar epithelial surfaces and is followed, by a more permanent phase of bronchiolization of alveolar epithelium as further healing of the injury takes place.